Clearly, the foreclosure crisis is real and is affecting a broad spectrum of people. In other words, the epidemic is not just hitting homeowners with subprime mortgages with adjusting rates. Indeed, it seems those at the upper echelons are being hit as well. Indeed, Ed McMahon‘s six-bedroom, five-bathroom, 7,000-square-foot house is on the verge of foreclosure.
While predatory lending certainly is component in the foreclosure epidemic, the example of Ed McMahon exemplifies the current problem – living beyond your means. Ed McMahon stated "If you spend more money than you make, you know what happens. . . " Indeed, this seems to be what is happening to many people in general. When lending was loose, people were qualifying for homes they likely had no business purchasing in the first place. Once the go-go days of the real estate boom ended, equity dried up and many are now upside down in their houses. It seems that no one expected for prices to turn so quickly and drop so hard.
I am not sure there is a silver lining in all of this, but I think with a foundering economy, high gas prices, and the steep downturn in the housing market, people are beginning to reassess their lifestyles, and perhaps question whether the immediate gratification mindset is sustainable any longer.